Good Governance and Human Security in the Caspian Region
By Hooshang Amirahmadi, Rutgers University
Source: AIC Insight, American Iranian Council

Payvand, Iran
June 9 2004

Lecture Presented at the Conference on:
Caucus, Caspian and Central Asia: Maritime Dimensions of Security May
14-16, 2004. Center for Foreign Policy Studies, Dalhousie University
Halifax, Nova Scotia, Canada

Ladies and Gentlemen,

Good morning! Let me begin by saying how honored I am to have been
invited to speak at this distinguished gathering of experts on
Caspian security. I want to thank David Griffths of the Center for
Foreign Policy Studies (of Dalhousie University, Halifax, Nova
Scotia, Canada) and Amir Mohagheghi of the Cooperative Monitoring
Center (of the Sandia National Laboratories, Albuquerque, USA) for
the invitation and joint sponsorship of this rather timely
conference. After the tragic events of September 11, 2001, the
Caspian region has taken a back seat to the Middle East, where the
United States has focused its war against terrorism, the former Iraqi
regime, and now the religious and nationalist Iraqi rebels. Yet the
Caspian region and its security are no less important to global
peace, regional stability, and American security.

Equally important is the security of the Caspian region for its own
people, particularly if viewed from a multidimensional perspective,
involving human-social, military-strategic, resource-economic,
marine-environment, geopolitics-boundaries, and emergency-management
security issues. In this lecture, however, I wish to focus my talk on
“good governance and human security in the Caspian region,” covering
the five littoral states: Iran, Russian Federation, Kazakhstan,
Turkmenistan, and Azerbaijan. I shall begin with an outline of my
conceptual thinking on the subject and then apply the framework to
the real situation in the countries. Except as otherwise specified,
the statistics I refer to in the lecture are for 2001 and taken from
the Human Development Report 2003 of the United Nation Development
Programs (HUR 2003, UNDP).

For centuries, the Caspian region was the strategic crossroads for
the empires of Europe, Asia, and Africa. Control of its vital land
and water routes, particularly for the spice trade, assured great
power and wealth; it also invited rivalry – “the Great Game.” During
the Cold War, ideological confrontations were added to the
geopolitical allure of the area, causing the region to serve as a
fault line in the East-West struggle. Now that technological changes
have diminished the significance of its trade routes and the Cold War
has ended, the control of the region’s rich hydrocarbon resources has
become the focus of international business and political players —
the region has once again become a pivotal frontier.

However, it is a frontier vastly different from that of the past.
History teaches us that while new frontiers bring significant
dangers, they also generate opportunities for progress. The
disappearance of the Soviet Union prompted regional and outside
players to expand their influence in the region – a game
characterized by gross shortsightedness with respect to the people in
the region and their needs for good governance and human security.
Governance – the way society collectively solves its problems and
meets its needs, and human security – human rights and human capacity
development, are the most critical challenges that the littoral
states must meet in order to advance their societies in the global
community.

Governance and Security Requirements of the New World

Till the end of the Cold War, security was understood in largely
political and military terms as it was defined by the state for the
protection of its national territory and control of its people. As
such, neither human security nor governance were central to the
security debates. Both were submerged under the rubric of national
sovereignty and territorial integrity – the two most sacred defensive
functions of the nation-state in the Cold War era. This political
concept of security was partly influenced by the American experience,
where early theories of international security were developed.
Emergence of a democratic-imperial capitalist America, in parallel
with the emergence of the Soviet Union as another world power of a
“social-imperialist” dictatorial nature, was the key factor.

But the bi-polar, state-centric world, which gave birth to this
concept of security, has largely disappeared: the ambitious tightly
knit USSR has been partially replaced with a loose and largely timid
Commonwealth of Independent Countries (CIS), and Western Europe has
gained relative political autonomy from the United States in
international relations. Even Japan now has become politically
assertive in global matters. One consequence of this is that a new
world has emerged where the state is no more the only player and
security is no longer only the state’s business. Specifically, in the
current tri-centric world where the state is challenged by
multinational corporations and civil society groups, a new concept of
security is emerging where governance and human security are the key
concepts alongside the old concept of state security.

Prior to World War II, the concept of security was dominated by
liberal ideas, which gave prominence to legal arguments and state
preference, as opposed to capabilities, and tended to view
international relations in optimistic terms. In the post-World War
II, that is in the Cold War environment, realists, and then
neo-realists, took over the security field and placed state power in
the center of their new constructs as a means of regulating an
otherwise anarchic international system. Security then emerged as a
field preoccupied with constraining the power of other sovereign
states and non-state actors through military deterrence and
containment. But pre-emption, a concept central to the current Bush
doctrine, was not allowed. The current United States defense strategy
has gone even beyond pre-emption, in practice becoming a prevention
strategy.

The Vietnam War helped to weaken the realists and increase the
predominance of critical theories in security and international
relations. The road was then opened to new ideas, some of which, like
deconstructionism and post-modernism, begin to question the
ideological basis and assumptions of political security as a means of
state domination. The state was also rejected as the only unit of
world security. It was argued that the Hobbsian view of the
individual as inherently ruthless and self-driven is contrary to
human experience and must thus be rejected. This cultural approach
was complemented by the globalization debate, arguing that it has
empowered the transnational corporations in international relations.
Humanizing the individual, recognizing the corporate players, and
limiting the sovereign privilege of the state meant that the old
state-centric security concepts were no longer valid in the emerging
post-Cold War world.

The international system is now viewed as having three groups of
stakeholders: the state, the multinational corporation, and the
individual. This latter in turn was considered as having a
three-dimensional existence: member of the human race, self, and
citizen (civil society actor as well). Only this last dimension was
recognized by the old state-centric security concept: that state
security also meant in a sense the security of its citizens, who were
considered anarchical and assumed to have contradictory (national)
interests to those of citizens in other states. Here, citizens are
territorially bound within a sovereign entity – the nation-state.
Individual as a member of the human race or as self was considered
irrelevant and in fact anti-security.

Expanding the rights of the individual beyond citizenship rights and
accounting for the corporate players meant that a new approach was
also needed to conceptualize the way societies were governed, namely
a governance model. The old concept held that citizens have governing
rights but have, under democracies, bestowed that right to their
state. In dictatorships, it was held that such rights are usurped by
the state. But as far as security was concerned, the state
represented its respective citizens in both cases, and the
representation was legitimate to the extent that the state did indeed
provide the required strategic security. In other words, the
protective state, democratic or otherwise, had an inalienable
sovereign right to security.

Governance, the way society collectively solves its problems and
meets its needs, requires public participation, decentralization and
partnership among the state, the civil society and the corporate
sector. The key concept of partnership in turn involves or enhances
consultation, cooperation and coordination across functional
(sectoral) and territorial (spatial) units of the nation-state.
Governance is, thus, a more integrated approach to decision-making,
development planning, and societal management. It improves
transparency, accountability and social inclusion, and thus results
in societal cohesiveness. More importantly, the model fits the
tri-centric world of the state, the civil society and the corporate
sector.

The governance model is, thus, only possible under a democratic state
or at the least a state that is prepared to recognize the rights of
its citizens beyond the ordinary citizenship rights to include rights
they are entitled to as individuals and members of the human race.
These rights include human rights as defined in the UN Universal
Declaration of Human Rights, and human development as outlined in the
UN Millennium Development Goals. Included in these documents are
political, economic, social, cultural, territorial, institutional,
spiritual, ideological, and informational needs and aspirations. From
this perspective, states are classified as high, medium, and low
human development achievers.

Besides these changes, globalization has also resulted in a number of
significant developments, the most important of which are the
emergence of issues that are both threats and panaceas to the
security concerns of the state, the individual, and the corporation.
These include terrorism, weapons of mass destruction, HIV/AIDS, drug
trafficking and addiction, environmental degradation, poverty,
corruption, and heightened trans-border traffic of people and
commodities. For example, the Afghan opium trade is a major security
concern for Iran but a security panacea for Afghan cultivators; and
corruption in Caspian states is a major means of wealth accumulation
but threatens the social fabric of the nations. The emergence of
issues as security factors adds the concern of dealing with non-state
actors, who are often not bound to any particular territory.
Terrorism is, evidently, a case in point.

Globalization, by making peoples and states more interdependent has
increased poverty and income inequality though it had the potential
to reduce them. Globalization has particularly endangered the
security of the smaller developing countries whose governments are
slow to adapt to technological and societal changes, and who have
more difficulty seeing beyond short-term financial interests toward
the long-term health of their peoples. Competing for international
resources can be a dangerous proposition for the poorer states, as
they already are facing tremendous challenges in managing their debts
and fueling sustainable growth. More critically, their relative
poverty in the absence of appropriate governance makes them highly
exploitable by multinational corporations. In addition, competition
among nations to attract foreign investment leads to a lack of
taxation, labor law, and environmental protection.

Another critical feature of the new tri-centric world system is a
built-in tension in its drive for simultaneous stability and chaos, a
development that has followed the emergence of a global civil society
of global actors and constituencies, and thus global accountability
and common vulnerability. In particular, the system is caught between
two diametrically opposing tendencies, one calling for integration
and cooperation and the other creating conditions for disintegration
and conflict. Let us call these influences world-integrating forces
and world-disintegrating forces. Broadly speaking, world-integrating
forces include the corporate sector and technological forces, while
disintegrative forces are comprised of interventionist states and
certain non-state fundamentalist actors such as terrorist
organizations and ethnic separatist movements.

There are many ramifications of the contradictory tendencies for
integration and disintegration; the one I believe is most pivotal for
a new paradigm of global security and coexistence is the diminishing
utility of illegitimate power and offensive force, including
militarism and violence, the so-called “hard power,” in gaining
societal hegemony or maintaining a popularly undesirable status quo.
As the power of offensive force has diminished, particularly when
used unilaterally and preventively, economic force and information
technologies, along with other components of so-called “soft power,”
have become the most effective means of influence and domination.
Indeed, Japan and Germany have grown into powerful international
forces almost entirely because of their economic strength and
information-processing capabilities. In the absence of an expansive
“soft power,” no amount of “hard power” may be exercised to gain
dominance, legitimacy, or democracy.

In the tri-centric world, military power is not the most effective
way of providing security for a country. The United Nations
Development Forum says “the world can never be at peace unless people
have security in their daily lives. Future conflicts may often be
within nations rather than between them—with their origins buried
deep in growing socio-economic deprivation and disparities. The
search for security in such a milieu lies in development, not in
arms.” It will be impossible for a developing nation to make progress
towards such goals as peace, development, environmental protection,
human rights, and democratization without attending first to the
sustainable development of its people’s capacities. The lack of human
security, a universal issue now, is one of the causes of national
discord, and can lead to multinational military conflicts. These
conflicts can be prevented by meeting threats to human security
before they become larger and more violent problems.

With the growing recognition of economics and information
technologies as fields of force, and thus means of security, the
state has come under increasing pressure to show performance in these
areas. This demand is particularly significant in the context of the
increasing rights of individuals and corporations. Significantly,
under the new condition, totalitarian and authoritarian regimes are
increasingly forced to accept the legitimate rights of their human
and corporate elements, and become accountable to national and global
societies. Indeed, the state is viewed as legitimate only to the
extent that it is acceptably developmental and democratic. Otherwise,
they are considered failed states; such states are increasingly
barred from claiming sovereignty, a concept that has increasingly
become people-centered.

Experience and Challenges of the Littoral Caspian States

How have the littoral Caspian states fared in the tri-centric world,
and what challenges do they face in security and governance? The
answer to this question must naturally recognize the significant
differences that exist among them in relation to their geography,
population, resources endowment, historic and cultural significance,
and regional and international relations and standing. Iran and the
Russian Federation, for example, have bigger economies and larger
populations, and are far more developed, wealthier, and better placed
strategically than Azerbaijan, Turkmenistan and Kazakhstan.
Nevertheless, they suffer from common problems and enjoy similar
advantages.

Iran and Russia should have been major regional integrationist forces
given their vast and strategic geographies and populations. In
reality, however, they are only marginally influential in their
region and are often seen as siding with disintegrative forces.
Iran-US conflict and US- Russia competition are key obstacles to the
potentials these countries have to assume a more active and effective
role in various regional matters. For example, Iran and Russia only
play peripheral roles in mediating regional conflicts, such as that
between Azerbaijan and Armenia, as they themselves have unresolved
conflicts with some states or ethnic groups at home or in the region.
And, more significantly, the states still need to find a solution to
the problem of the Caspian Sea legal regime.

Iran’s international political challenges include allegations
regarding state terrorism and nuclear proliferation. Both these
allegations are directed at the Iranian state, while terrorism in
most nations is a non-state phenomenon. Russia, on the other hand, is
a nuclear state and likes to view itself as a victim of Chechen
terrorism. Yet, Russia refuses to actively engage itself in the
so-called American war against terrorism, viewing the fighting in
Afghanistan and Iraq as largely rooted in the American desire to
dominate the region. The other Caspian states are largely viewed as
irrelevant to the terrorism and nuclear issues, but also have their
own international challenges. For example, the dispute over
Nagorno-Karabakh between Azerbaijan and Armenia remains a time bomb,
and Azerbaijan and Turkmenistan need to settle claims over fields in
the Caspian Sea.

Domestic politics are almost equally problematic in all five Caspian
states. Iran and Russia are authoritarian states that allow dissent
but also repress opposition selectively. They divide the population
into conformists and nonconformists, allowing freedom to the former
while restricting the rights of the latter in significant ways.
Azerbaijan, Turkmenistan and Kazakhstan, on the other hands, are
totalitarian states where elections are disallowed or allowed only as
an international public relations ploy. In all these states
candidates for public offices are vetted, overtly or covertly, and
elections are rigged. Kazakhstan is not a signatory to the
International Convention on Civil and Political Rights (1966) and the
International Convention on Economic, Social and Cultural Rights
(1966), while Iran has refused to sign the UN Convention Against
Torture and Other Cruel and Inhumane or Degrading Treatment and
Punishment (1984), and the UN Convention on the Elimination of All
Forms of Discrimination Against Women (1979). Ideological rigidity
and power monopoly continue to remain major obstacles to the
development of a democratic polity in the Caspian states.

Economically, too, the Caspian states do not fare well in the new
world. While relatively wealthy because of oil and gas resources,
their GDP per capita (PPP US$) is below the world average of about
$7,376. More importantly, their per capita GDP has declined in the
last two decades or so, while income inequality has increased as has
regional and sectoral disparities. The littoral states are also only
partially integrated into the global economy through the extractive
oil and gas sector, though Russia has the added advantage of being a
big exporter of armaments. Their share of the total imports of
industrialized countries (including oil) is very low, under 0.5
percent, with the exception of Russia, whose share is comparable to
the major Western European economies. Statistics for their share of
the total exports from the same countries is similarly low. With the
exception of Russia again, some 70 to 80 percent of imports are
consumer goods; only 1 to 2 percent is capital goods.

Foreign investment remains miniscule in Iran, Azerbaijan,
Turkmenistan and Kazakhstan, and the little capital that has been
attracted concentrate in the oil and gas sector. In Iran, for
example, only $400 million in foreign capital has been invested in
non-oil sectors since the revolution. Iran’s manufacturing value
added per capita in 2001 was only $285 (1990 US dollars) compared to
$876 for the developing countries (See IMF 2003 report on Iran’s
economy). Except for Russia, the other Caspian states have no better
position with respect to non-oil foreign investment or the value
added in manufacturing sector. In Azerbaijan, the manufacturing
sector has all but vanished. The fact is that the Caspian states
remain undeveloped and largely isolated from the international
non-oil markets. Of all the Caspian states, only Russia can claim to
be sufficiently engaged and developed.

The Caspian states are decades behind in technological development,
despite the fact that in countries like Iran and Russia, the people
could have created a powerful competitive economy. Russia is again
relatively advanced in technological fields but all the other states
are decades behind in the seven or eight key industries of our age:
electronics, telecommunications, computer hardware and software, new
materials, biotechnology, civil aviation, and genetic engineering.
The high-technology sector makes up 8 percent of Russia’s
manufacturing exports. For Iran the figure is 2 percent and for
Kazakhstan and Turkmenistan 4 percent and 5 percent respectively.
Russia spends 1 percent of its GDP (Purchasing Power Parity – PPP
$US) on research and development, other littoral states much less.
For Iran the figure stands at 0.1 percent, for Azerbaijan at 0.2
percent, for Kazakhstan at about 0.3 percent, and for Turkmenistan at
close to zero. Compare these figures to the figure for South Korea at
2.7 percent. Figures for internet users are similarly low: for every
1,000 people, 29.3 Russian citizens are internet users, for Iran
15.6, for Kazakhstan 9.3, for Turkmenistan 1.7, and for Azerbaijan
3.7. Compare these figures to the figure for South Korea at 521.1.

The Caspian states continues to mismanage their economies, which have
declined relative to the years immediately preceding the Soviet era
and pre-revolution in Iran. Managers are appointed on ideological and
relational bases, not on the basis of expertise or merit. Corruption
and rent seeking is rampant, and the governments dominate and lead
the economies at the expense of the private sectors, except for a few
well-connected, often corrupt, wealthy businessmen. It will take
years before these states can turn their economies and
information-processing capabilities into fields of force for security
purposes. Yet unless they mange to do so in the foreseeable future,
the Caspian states will increasingly have to resort to military
expenditures and thus further drain themselves of resources for
economic and technological developments. At present, they spent
almost as much on military as on health care or education. The
Caspian states spend between 3.5 and 4.4 percent of their GDP on
education and between 0.6 and 3.6 percent on health care, while
spending between 1 and 4.9 percent on military expenditures.

Socially, too, there are disturbing developments in these countries
when compared to developments globally. Income inequality is widest
in Russia and Iran, where the share of the richest 10 percent is
between 10 to 20 times larger than the share of the bottom 10 percent
poor. In Azerbaijan, where poverty is a more serious problem, almost
10 percent of the population earns less than $2 a day, and the GDP
per capita shrinks 1.3 percent every year. Between 30 to 45 percent
of the people in the littoral states live below the poverty line, and
the female share of the total earned income is between 10 and 15
percent. Women are economically more exploited than men across the
states, and in Iran they are also socially oppressed. The youth
unemployment stands at between 20 to 30 percent, and the annual rate
of “brain drain” ranges between 2 and 5 for every 1000 people, Iran
suffering the most. The young populations, about 60 percent of whom
are below the age of 30, also suffer from the lack of social
recreations. Many are addicted to drugs, particularly in Iran
according to official statistics. Ethnic groups remain restless and
some are plotting with foreign forces for separatist movements. In
Kazakhstan, regional disparity is extreme.

The Caspian states predominantly view their national strength and
defense in military terms, and thus pour a large percentage of their
resources into their military and police sectors. This tendency is
partly imposed on them, as they live in a dangerous neighborhood, but
some officials of the governments actually believe in the use of
offensive force and in the liberating power of violence. While Frantz
Fanon, the Martinican/French revolutionary political thinker, is no
longer widely read, his influence continues: “Violence is a cleansing
force,” he wrote in his The Wretched of the Earth, and it “restores
self-respect.” More specifically, the Caspian states continue to view
their security through the old state-centric lenses. The state
remains dominant and unanswerable to civil society and to private
businesses, and individuals are viewed as mere citizens with rights
determined by the state. The rights of the individual or citizen as
self or as members of the human race are peripheral at best.

Significant governance problems exist in the Caspian states. While
parliaments exist, they are often made null and void by decrees or
institutional mechanisms. Public participation in decision-making,
particularly in strategic areas, is even institutionally absent.
Almost no partnership exists between the state, civil society and the
business firms, and public policies often lead to social exclusion
rather than inclusion. The lack of participation and partnership
means that little cooperation and coordination exists across
functions and territories at almost every administrative level. No
wonder the Caspian states suffer from social incoherence and
political tension. The tragedy of September 11 has indeed exacerbated
the governance problem in the region as the states have often used
the security pretext to further limit freedoms, and abuse the human
rights and human development of their citizens. Political dissidents
are often labeled and dealt with as “terrorists.”

Not a single Caspian state is among the high human development
category of the UN report on Human Development. Of 175 countries
included in the UN ranking of nations with regard to their
achievements in human development, the Human Development Index (HDI)
rank for Russia is 63 and for Iran 106, with other nations in between
these two figures: Kazakhstan 76, Turkmenistan 87, and Azerbaijan 89.
Iran’s situation is particularly problematic as it is the only
Caspian littoral state with a negative GDP per capita (PPP $US) rank
minus HDI rank figure. At –29, Iran is only better than 7 countries
in the 175 countries included. The data is a good indication of state
efficiency in managing its resources. A higher positive figure will
indicate a more efficient bureaucracy, while a lower figure shows
exact the reverse. In terms of human rights, too, the Caspian states
fare badly compared to many in the world, with Iran, Kazakhstan and
Turkmenistan topping the list in the region with the most negative
records.

There is also some good news. The countries’ political cultures are
changing. Foreign policy is increasingly based on national interest,
away from ideological considerations, and increasingly thicker lines
are drawn between the states and disintegrative forces. It is now
recognized that new nuclear proliferators will not be tolerated, and
that identification with terrorists is dangerous. An increasing
number of the political elite now sees offensive force as
counterproductive, though the states continue to have a hard time
grasping the value of defensive forces such as economics and
technology or human rights and human developments. The role of
government is increasingly being challenged by a growing number of
NGOs and business firms throughout the region, and humanitarian
causes are receiving significant attention. A clear break is
developing between the state and NGOs, and this change demonstrates
the fact that the legitimacy of the state in the region has sharply
declined due to its inefficiency and the lack of transparency and
accountability.

There are positive developments in the economic sphere too. The
states have set up an “oil fund” to better manage their budgets and
allocate resources for future development, and their economies are
growing while their macroeconomic environment is stable. With the
exception of Russia, Caspian littoral states as yet have no
multinational corporations, but the business communities are
increasingly asserting their relative autonomy from the states. This
is particularly true of the small industrial entrepreneurs in the
forefront of the struggle for modernization of the economies. A few
Iranian companies now operate internationally, and an expatriate
counterpart has also emerged in the West. The internationalization of
these companies will help Iran’s economic integration, technology
transfer, capital flow, and foreign partnership. It will take a while
before firms in Azerbaijan, Kazakhstan, and Turkmenistan can hope to
achieve international prominence.

There is some good news socially as well. The middle class continues
to remain assertive and demand liberalism and democracy. Compared to
the past, their numbers are large and their quality high in Russia
and Iran. They now have better connections with both the working
people and the modern sections of the upper classes. In other
littoral states, however, they remain less significant but growing as
well. It is particularly important to note the progress that women
are making in private and public domains. Their literacy rate and
economic independence has improved significantly in recent years,
though their relative wellbeing is much lower than that achieved by
men. In Iran, there are many great women artists and poets, powerful
political voices, a Nobel laureate, an Oscar nominee, a best-selling
author, and a beauty queen. Women’s achievements have been even more
notable in the Russian Federation.

Ultimately, the main source of the Caspian states’ wealth today and
tomorrow is their people. Here too there is good news. Their level of
education and professionalism is fast improving, as is their global
reach and awareness. The literacy rate is well over 75 percent in
every state, and, according to the World Bank, 20 percent of the
relevant age group in the Caspian states participates in some form of
tertiary education. There are now millions of university graduates in
these countries, and their size is particularly expanding in science
and technology fields as well as in key social science disciplines.
These achievements notwithstanding, the Caspian states continue to
fail to generate visionary leaders among themselves. Why? In a
nutshell, the problem is rooted in the undeveloped nature of their
polity, and largely in the absence of well-developed political
parties.

To conclude this discussion, let me say that the Caspian littoral
states face a multiple of political, economic, social, cultural,
spatial, institutional and international challenges in order to
develop their countries. Among them, and from a security perspective,
governance and human development need to receive the highest
priority. The key to achieving success in these areas is to
intelligently mobilize and utilize available resources. Given that
these states are oil and gas rich, their attention must particularly
focus on a more transparent and accountable management of the revenue
from these natural resources. They must translate the finite
resources provided by nature into sustainable development, and this
needs to be done as quickly as possible, since for most states in the
Caspian region, oil provides a very short window of opportunity – in
Azerbaijan, e.g., less that 20 years.

It is often the case that a sound fiscal policy, like creation of an
“oil fund,” is viewed as the only proper policy. Yet, transparency,
accountability, a vibrant civil society, and genuine democracy play
an even more important role. It is indeed due to misunderstanding of
this aspect of natural resource management that most, if not all
natural-resources rich countries have less developed societies than
nations lacking significant natural resources: they have greater
poverty, income inequality and regional disparity, higher
international debt and dependency, more dictatorship and human rights
abuses, worse governance and legal procedures, and higher military
and nonproductive expenditures. While oil revenue is an additional
source of income and disruptive of traditional authority, it has also
led to declining per capita income and authoritarianism, raising the
likelihood for domestic conflicts.

To be sure, there is a political dimension to “resource curse.”
Revenues from the natural resources flow to the state, making it
relatively autonomous from the citizens and the private businesses.
They then often pay no taxes, or pay only negligibly, in such rentier
states, and thus these states receive little clamor for
representation from their citizens. The leaders here find no reason
to share power and often refuse to account for the revenues. When
transparency becomes a victim as a free press is suppressed, a host
of negative consequences will follow, including dictatorship and
human rights abuses. The absence of democracy then distorts economic
policy and national priorities. Thus, instead of seeking legitimacy
through the electoral process, the rulers seek it through
inappropriate spending. Rent seeking, corruption, debt accumulation,
and inflation can result, leading to political instability and
conflict, which is how the regime of the former Shah of Iran
collapsed. A recreation of the past then becomes a desirable
alternative and the future fails to come to life.